Missouri Businesses Will Pay Higher Unemployment Taxes In 2014

Missouri businesses will have to shell out more money for unemployment taxes next year in order to pay down debt the state owes to the federal government.

Missouri began borrowing federal dollars in 2008 to pay for jobless benefits after an economic downturn drained the state's unemployment benefits trust fund. Brendan Cossette with the Missouri Chamber of Commerce and Industry says that led to the feds levying a surcharge on Missouri businesses to repay the borrowed money.

"Every year that that debt is outstanding, the amount of the surcharge owed to the federal government increases," Cossette said.

Missouri businesses currently pay $42 per employee per year, but that figure will increase to $63 per employee per year on January 1st. Cossette says the state owes the federal government $308 million for unemployment insurance.

"So until that's resolved, employers are (going to) have to pay," Cossette said. "If the debt is not paid off by November 10th of 2014, on January 1st of 2015 our employers will be assessed $84 per employee."

Thirteen other states, including bordering states Arkansas and Kentucky, have also borrowed money to pay for jobless benefits.

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A new report says Missouri's unemployment rate edged higher last month, while the state gained 6,200 payroll jobs.

The state Department of Economic Development said Tuesday that the August jobless rate was 7.2 percent, up one-tenth of a percentage point from July.

The report says the biggest increase in jobs was in the government sector. It added 5,700 jobs - including 5,000 for local governments. The agency attributes the gains to the early start to the school year.

Missouri’s unemployment rate is now at its lowest point in four years.

November’s jobless rate is at 6.7 percent, down from 6.9 percent in October. At the same time, though, the state lost 6,800 non-farm jobs last month. John Fougere is with the Missouri Department of Economic Development.

“There’ll be blips from time to time, but we never focus on any one month of data when it comes to the number of jobs gained or lost, but instead the overall trend," Fougere said. "Right now the overall trend of Missouri’s economy appears to be positive.”